The most recent StewartBrown report clearly illustrates the significant financial challenges faced by aged care providers. It incorporates detailed data from 1,108 aged care homes and 46,938 home care packages across Australia and is the largest benchmark in the aged care sector.
As demonstrated by the headline statistics from the report, shown below, for the nine months prior to the report being published, on 31 March 2020, financial sustainability of the residential aged care sector has shown to have deteriorated in all geographic regions well above the impact of COVID-19, and unless additional specific targeted funding and structural reform is implemented it may lead to closure of residential aged care homes and will risk further necessary investment into the sector. The headwinds are also becoming a major concern in relation to in-home care where the profit levels have deteriorated for the period to October to March, revenue has decreased with the offset being a further reduction in direct care staff hours, and the associated cost, which may be unsustainable going forward.
Residential Care Headline Statistics
- 60% of aged care homes recorded an operating loss for the nine months to Mar-20
- 34% of aged care homes recorded an EBITDAR loss (operating cash loss) for the nine months to Mar-20